EMPLOYMENT AGREEMENT
(Amended and Restated)
THIS EMPLOYMENT AGREEMENT (this "Agreement"), dated this 16th day of
July, 1997 (the "date hereof"), with an effective date of the 15th day of
April, 1996 (the "effective date"), by and between Laboratory Specialists,
Inc. (the "Company"), a Louisiana corporation, and Arthur R. Peterson, Jr.,
an individual ("Peterson").
WHEREAS, the parties hereto entered into this Employment Agreement on
April 23, 1996, which was amended and restated on September 26, 1997;
WHEREAS, the parties have determined that it is in the best interest of
the Company that this Agreement be further amended to extend the term of this
Agreement, effective as of the date hereof;
WHEREAS, Peterson is currently serving as President and Chief Executive
Officer of the Company;
WHEREAS, the Company is a wholly-owned subsidiary of Laboratory
Specialists of America, Inc., of which Peterson is currently serving as
Treasurer;
WHEREAS, the Company desires to obtain the services of Peterson on a
full-time basis in order to preserve the continuation of the operations of
the Company with its suppliers, customers and others, and Peterson desires to
render such services to the Company;
NOW, THEREFORE, for and in consideration of the conditions hereinbelow
to be performed on the part of the respective parties hereto, and in
consideration of the mutuality thereof, the parties hereto agree as follows:
1. TERM OF EMPLOYMENT. The Company hereby agrees to employ Peterson,
and Peterson hereby agrees to serve the Company, during the period beginning
on April 15, 1996 and ending on April 15, 2000 (the "Period of Employment"),
or on such earlier date as provided in Sections 4 and 5 hereof; provided,
however, that the Period of Employment shall be extended an additional one
year period to next April 15 immediately following the end of each full year
of employment with the Company that Peterson completes pursuant to and
accordance with this Agreement.
2. DUTIES. Substantially all of the duties and responsibilities of
Peterson, subject to such travel as the duties of Peterson hereunder may
reasonably require, shall be performed by Peterson at and from the corporate
offices of the Company in Belle Chasse, Louisiana.
2.1 During the Period of Employment, Peterson shall serve as
President and Chief Executive Officer of the Company and shall devote his
full time, attention, skill, energy and best efforts to the duties assigned
to him from time to time by management and/or the Board of Directors of the
Company, and shall, but without obligation hereunder, serve the Company in
such additional executive officer positions to which he may be elected or
appointed by the Board of Directors of the Company, subject to acceptance
by Peterson of such additional executive officer position or positions.
Notwithstanding the foregoing, Peterson may engage in any other pursuit or
endeavor which does not conflict with his ability to perform his duties to
the business interests of the Company, provided that such other pursuit or
endeavors does not violate the duty of loyalty and care which Peterson has
to the Company by reason of this Agreement or in his capacity as an
executive officer of the Company.
2.2 As an employee of the Company, Peterson shall be subject to the
overall supervision and instructions of management of the Company and, if
applicable, that are associated with the executive officer position or
positions held by Peterson which shall be subject to the overall
supervision and instructions of the Board of Directors to the Company.
EMPLOYMENT AGREEMENT PAGE 1
3. COMPENSATION AND OTHER BENEFITS. During the Employment Period, the
Company shall pay or provide to Peterson and Peterson shall be entitled to
receive or have maintained for his benefit, the following:
3.1 Commencing on the effective date, the Company shall compensate
Peterson for the services to rendered by him hereunder at the rate of one
hundred sixty-five thousand dollars ($165,000) per year, payable in equal
semi-monthly installments on the first and fifteen day of each month,
commencing on July 1, 1998.
3.2 In addition to the compensation payable to Peterson pursuant to
Section 3.1 hereof, within 90 days following the end of each fiscal year of
Laboratory Specialists of America, Inc. ending during the Employment
Period, the Company shall pay Peterson a bonus equal to the lesser of (i)
$50,000 or (ii) 10 percent of the net income of Laboratory Specialists of
America, Inc. before provision for income taxes determined in accordance
with generally accepted accounting principles as reflected on the audited
financial statements of Laboratory Specialists of America, Inc. for the
immediately preceding fiscal year. The bonus payable pursuant to this
Section 3.2 shall be deemed earned by Peterson as of the end of each such
fiscal year of Laboratory Specialists of America, Inc. for all intents and
purposes, including for federal income tax purposes, notwithstanding
termination of the employment of Peterson on or after the end of such
fiscal year of Laboratory Specialists of America, Inc. To the extent that
stock options are granted by the Board of Directors of Laboratory
Specialists of America, Inc. to its executive officers, Peterson shall be
deemed to be a member of the group to which stock options are granted, and
his stock option grants shall be determined in the same manner as are the
stock option grants of other executives in the group.
3.3 Peterson is hereby authorized to incur reasonable expenses for
the promotion of the Company's business, including entertainment, travel
and similar expenses, and he shall be reimbursed therefore by the Company
upon his presentation of itemized accounts of such expenditures.
3.4 The Company shall provide to Peterson health and disability
insurance benefits comparable to those provided to the executive officers
of the Company either as a group or individually.
3.5 Peterson shall be entitled to reasonable periods of vacation with
pay in each year, and reasonable periods of sick leave with pay
commensurate with his position, in accordance with Company policy as
established by the Board of Directors.
3.6 The Company shall provide to Peterson and maintain insurance, at
the Company's cost and expense, covering the life of Peterson in the face
amount of one million dollars ($1,000,000), the proceeds of which shall be
payable to such beneficiary that Peterson shall designate or in the event
of failure to designate a named beneficiary shall be payable to the estate
of Peterson.
3.7 The Company shall pay to Peterson an automobile allowance of five
hundred dollars ($500) per month, payable on the fifteen day of each month
while employed pursuant to this Agreement, and shall provide at the sole
cost and expense of the Company a mobile phone to assist Peterson in the
performance of his duties and responsibilities as an employee and, if
applicable, executive officer of the Company.
4. DISABILITY OR DEATH.
4.1 In the event the Board of Directors of the Company determines in
good faith that Peterson is unable, because of physical or mental illness
or disability, to render services of the character contemplated hereby and
that such disability reasonably may be expected to be permanent or to
continue for a period of at least six (6) consecutive months (or for
shorter periods totaling more than six (6) months during any period of
eighteen (18) consecutive months), in such event the Board of Directors of
the Company may elect to terminate the employment of Peterson hereunder
upon written notice by the Company to Peterson effective on the next first
or fifteenth day of the month following the date of such notice. At any
time and upon reasonable request therefor by the Company, Peterson shall
submit to medical examination by a physician designated by the Company in
New Orleans, Louisiana, for the purpose of determining the existence,
nature and extent of any such disability. In the event the Board of
Directors elects to terminate the employment of
EMPLOYMENT AGREEMENT PAGE 2
Peterson pursuant to this Section 4.1, Peterson shall be entitled to
receive any amount of compensation determined pursuant to Section 3.1
hereof up to the date of the termination of the employment of Peterson
payable on the dates established pursuant to Section 3.1 hereof.
4.2 In the event Peterson shall die during the Employment Period,
this Agreement shall terminate effective on the next first or fifteenth day
of the month following the date of death, and the Company shall pay to the
spouse of Peterson, or if unmarried at the time of his death, to the estate
of Peterson, the compensation payable to Peterson pursuant to Section 3.1
hereof for a period of three (3) months following the effective date of
termination of this Agreement pursuant to this Section 4.2, payable on the
dates provided for such compensation payment thereunder.
4.3 In the event of termination of this Agreement pursuant to Section
4.1 and/or Section 4.2 of this Agreement, Peterson (or his spouse or if
unmarried on the date of his death his estate) shall be entitled to receive
accrued and unpaid expense reimbursements, automobile allowance and any
unpaid bonus amounts awarded to Peterson prior to such termination and
stock option grants awarded to Peterson prior to such termination
exercisable in accordance with the terms of such stock option grants.
5. TERMINATION FOR CAUSE. In the event the Board of Directors of the
Company determines in good faith that Peterson is guilty of gross negligence
or fraud materially injurious to the Company, the Company may terminate this
Agreement, and all obligations hereunder shall thereupon terminate.
6. NON-COMPETITION. During the Employment Period, or, if longer, the
period of employment of Peterson by the Company, Peterson will not engage in
competition with the Company, either directly or indirectly, in any manner or
capacity as an employee or executive officer of a competitor company in any
phase of the business carried on by the Company at any time.
7. CONFIDENTIALITY. During the Employment Period, or, if longer, the
period of employment of Peterson by the Company, and for a period of three
(3) years thereafter, Peterson will not divulge to anyone, other than the
Company or persons designated by the Company in writing, any confidential
material information directly or indirectly useful in any aspect of the
business of the Company or any of its subsidiaries, as conducted from time to
time, as to which Peterson is now, or at any time during employment shall
become, informed and which is not then generally known to the public or
recognized as standard practice.
8. CERTAIN PROVISIONS TO SURVIVE TERMINATION; ETC. Notwithstanding any
termination of his employment under this Agreement, Peterson, in
consideration of his employment hereunder to the date of such termination,
shall remain bound by the provisions of Section 6 and 7 hereof, and
consequently, in addition to all other remedies that may be available to it,
the Company shall be entitled to injunctive relief for any actual or
threatened violation of such Sections.
9. NON-ASSIGNABILITY. Neither party hereto shall have the right to
assign this Agreement or any rights or obligations hereunder without the
written consent of the other party.
10. ARBITRATION. Any controversy or claim arising out of or relating
to this Agreement, or the breach thereof, shall be settled by arbitration in
accordance with the Rules of the American Arbitration Association and
judgment upon the award rendered by the arbitrator or arbitrators may be
entered in any court having jurisdiction thereof. The arbitration
proceedings shall be conducted in New Orleans, Louisiana, unless otherwise
agreed by the parties hereto. The arbitrator or arbitrators shall be deemed
to possess the powers to issue mandatory orders and restraining orders in
connection with such arbitration; provided, however, that nothing in this
Section 10 hereof shall be construed so as to deny the Company the right and
power to seek and obtain injunctive relief in a court of equity for any
breach or threatened breach by Peterson of any of his covenants contained in
Sections 6 and 7 hereof.
11. NOTICE. All notices required or permitted to be given hereunder
shall be in writing and shall be deemed to have been given forty-eight (48)
hours after depositing in the United States mail, certified mail, postage
prepaid, addressed to the party to receive such notice at the address set
forth hereinbelow or such other address as either party may give to the other
in writing pursuant to written notice pursuant to this Section:
EMPLOYMENT AGREEMENT PAGE 3
If to Peterson: (PERSONAL AND CONFIDENTIAL)
Mr. Arthur R. Peterson, Jr.
1111 Newton Street
Gretna, Louisiana 70053
If to the Company: Laboratory Specialists, Inc.
1111 Newton Street
Gretna, Louisiana 70053
12. GENERAL. The terms and provisions herein contained (i) constitute
the entire Agreement between the Company and Peterson with respect to the
subject matter hereof, (ii) may be amended or modified only by a written
instrument executed by the parties hereto, and (iii) shall be construed and
enforced in accordance with the laws in effect in the State of Louisiana
without regard to its conflicts of law provisions. Failure by a party hereto
to require performance of any provision of this Agreement shall not affect,
impair or waive such party's right to require full performance at any time
thereafter.
This Agreement may be executed in two or more counterparts, each of
which shall be deemed an original but all of which together shall constitute
one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement, as amended and restated, on the 16th day of July, 1998, with an
effective date of the 1st day of July, 1998.
"Company" LABORATORY SPECIALISTS, INC.
By:
-----------------------------------------
Larry E. Howell, Vice President
"Peterson"
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Arthur R. Peterson, Jr.
EMPLOYMENT AGREEMENT PAGE 4